The average price of a gallon of gas is at its lowest level since April 2009, giving rise to speculation about why the cost of oil continues to drop and how long consumers can expect the trend to last. Here are answers to common questions about the low price of gas:
Why are gas prices so low?
Jesus, why can’t you just enjoy this for a minute and not worry about that?
How long will gas prices remain low?
Forever.
Who benefits from the price drop?
Anyone who’s alive to enjoy low prices but dead before the full consequences of fossil fuel usage are felt.
Where does oil come from?
The decomposing remains of long-dead environmental regulations.
I own an electric or hybrid car. How does this affect me?
It means you wasted your fucking money.
Where is gasoline cheapest?
Definitely go to the Shell down off exit 17, it’s like six cents cheaper than the Sunoco right there.
Where does this put green technology?
Oh, we don’t need that anymore.
Does it get any better than this, folks?
No.
Isn’t it bad to increasingly rely on chemical fracking processes that have a negative impact on the environment and still unknown effects on human health?
Oh, my God, have you heard it could go even lower than $2.00? Seriously, it could happen. Think of all the money you could save! It’s like stuffing bills right in your pocket.
I love the way gasoline smells. Frankly, I find it arousing. Are there others like me, who’d be open to meeting up and exploring this interest?
I can be reached at home most weeknights: 312-555-4381.
Is there anything we can do to help out the energy companies that are losing money due to the decline in the price of oil?
Yes. Donation information can be found on the home pages of BP, ExxonMobil, Gazprom, and other oil and gas conglomerates’ websites.
I used to like the smell of gas when I was a kid. That probably explains a lot.
I’m not sure what they did to it but it smells completely different today. Now it smells like it will actually kill you.
Gas here in the PNW is about $1.75/gal.
Why is diesel still hovering around $3.30??
Fuck The Onion. Never quote or cite these progtard shitbirds ever again.
And do try to have a nice day, mm-kay?
@I_S, it is the difference between fully leaded and unleaded. I always found the smell of leaded gas pleasing, well sort of, I didn’t hate it though (which came in handy, oops, statute of limitations is wayyyy past). When we switched over to unleaded, then the smell became, more acrid maybe?
Anyway, that is why, leaded gas didn’t smell the same as the unleaded. Probably some damned non-studied chemical that is mandated and making us sick.
@Card, taxes and regulations. Of course both the federal and our state government voted (back around the turn of the century if memory serves) to screw over the truckers, especially the small independent ones. Can’t be giving the railroad unions or Uncle Warren any competition now, could we?
This one actually made me laugh out loud instead of the normal sadness the Onion brings me.
Thanks.
Why isn’t diesel falling as fast as gasoline? The reasons are complicated and numerous, part of a web of supply and demand that stretches from oil wells to shipping lanes to refineries to the gas station at the end of the road.
“Think of it as the solar system of oil. Crude is in the middle and these different fuels rotate around it. But these are very elliptical orbits,” said Tom Kloza, head analyst at the Oil Price Information Service.
Seasonal factors
Some of it is the normal seasonal shift in demand and refinery activity.
Just as gasoline prices tend to rise in the summertime — when 90- or 100-degree heat necessitates some changes in chemistry — diesel tends to get more expensive in winter. And as the calendar moves into December, the anticipated demand for diesel as a heating fuel in the months ahead has offset any price drops.
Plus recent changes in federal air pollution rules have meant cleaner burning diesel that is also more expensive to produce. And the diesel fuel market, less than half that of gasoline, just doesn’t respond as quickly when the price of crude drops, Kloza said.
Competing on price
“One of the recipes for getting people inside the convenience store or the big box store is to have a carrot. And that is very often a competitive gasoline price. But there’s just not as many diesel drivers,” he said.
But demand for diesel is growing, said Allen Schaeffer, executive director of the Diesel Technology Forum in Maryland.
As the U.S. economy has slowly recovered, more goods are being sold, which increases demand for trucking, which increases demand for diesel fuel. At the same time the previous high cost of fuel drove more and more motorists to diesel vehicles, which are advertised as 30 percent more efficient than gasoline consuming counterparts.
But refineries have not kept up, Schaeffer said.
“Gasoline is the thing most refiners were designed to optimize when they were built 40, 50 years ago. And there are limitations to how much tweaking you can do to produce diesel,” he said.
According to the U.S. Energy Information Administration, U.S. gasoline sales have been slowly declining since 2010, about 1.5 percent, as cars became more efficient. On the flip side, sales of diesel, which power everything from trucks to farm equipment to power plants, have increased 6 percent over the same period.
Waiting it out
That sort of shift in fuel demand is likely to mean diesel is going to sell at a premium for the time being, analysts say.
For now trucking companies are happy to see any reduction in fuel costs, even if it isn’t as much as their fellow motorists are seeing, Esparza said. Not that trucking companies are rushing to lower their rates for next year quite yet.
“Trucking companies don’t make adjustments every time fuel goes down. Because Monday [prices] could go back up again. For those sorts of changes you need time,” Esparza said.
http://www.dallasnews.com/business/energy/20141210-dramatic-drop-in-gas-prices-doesnt-carry-over-to-diesel.ece
more ……
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Still, the price of diesel has fallen 29 cents a gallon from where it was a year ago, according to AAA. But the price of regular gasoline has fallen 51.7 cents a gallon during the same period.
Part of the difference is the federal tax on diesel fuel is 6 cents more per gallon than gasoline — 24.4 cents vs. 18.4 cents — according to the The Association For Convenience & Fuel Retailing, an Alexandria, Va.-based trade association.
Another factor is related to changing world fuel demand, including the fact that the U.S. gasoline-powered automotive fleet is becoming much more fuel efficient, Ritterbusch said.
That has led to flat year-over-year growth in demand for gasoline in the U.S., which had driven prices down. The same can’t be said about diesel.
“This year, demand within the U.S. for diesel has been much stronger than for gasoline,” Ritterbusch said. That’s partially due to the U.S. economy’s growth and “the increased truck traffic that goes along with that.”
Companies that use a lot of diesel have seen a positive effect of overall lower crude oil prices.
“As the fuel goes down, the fuel surcharge goes down, so the savings get passed on to customers,” Kruepke said.
Marshall said he buys 200 to 230 gallons of diesel each time he fills up his semi-tractor, so any drop in the price adds up.
Marshall added that he understands, somewhat, why diesel and gasoline prices do not move in tandem.
“The old timers all claim that diesel fuel is a byproduct of making gasoline,”Marshall said. “The reality is diesel is its own commodity now. It’s grown in popularity with emerging economies using trucks and tractors and Caterpillars and burning up diesel fuel.”
Another piece of the diesel puzzle is somewhat ironic: The resurgent U.S. oil industry is using a lot of equipment that runs on diesel to pull crude out of shale formations.
“Keep in mind, also, that diesel is the fuel that really has been behind much of the surge and the rise in domestic oil production,” said Patrick DeHaan, a petroleum market analyst at gasbuddy.com. “In areas of North Dakota, you’re having generators run 24 hours a day on diesel.”
Any discussion of diesel prices also has to factor in global demand. The U.S. exports nearly a third of the diesel it produces to countries where diesel is the dominant fuel.
And, U.S. refineries are built to produce gasoline, which remains the overwhelmingly dominant transportation fuel source in this country, the world’s largest consumer of oil.
From each barrel of oil, U.S. refineries produce 18 to 21 gallons of gasoline and 10 to 12 gallons of diesel fuel, on average, according to the convenience and fuel retailing association.
“Refinery yields can be somewhat tweaked, but to produce significantly more (diesel) would require significant upgrades costing billions of dollars,” the association says on its website.
Yet another factor is that home heating oil and diesel, categorized as distillate fuel in the refining process, are essentially the same. Cold weather and heavy snow arriving earlier than usual in the U.S., has led to an increase in demand for home heating oil.
Also, a late harvest has also contributed to an increase in diesel demand.
“Farmers in the Midwest have been busy harvesting, and their equipment gulps diesel fuel,” DeHaan said.
http://www.jsonline.com/business/diesel-fuel-prices-remain-stubbornly-high-b99401777z1-284669531.html
Card802.; diesel was 2.67 in Spartanburg SC at the Mr Fuel .It was about 40 cent more in Charlotte NC.I found out on internet it was because taxes are higher in NC.At FedEx we usually get a 30 to 40 cent discount off pump price. Yesterday was the cheapest I have fueled my Truck since 2009.It felt great .Finally some cheap fuel.I hope it last at least another year so I can really save some money.
This was just fucking stupid…
Diesel is still over $3 in SE Michigan.
We love to screw the truckers and foreign car buyers, hard.
There is a large landfill south of Silicon Valley. When the price of gas/diesel shot up in 2007 they tacked on a substantial “Fuel Surcharge” to the dump fees to offset the rise in their fuel costs to run their large bulldozers. Then in 2008 fuel prices plummeted. Guess how long it took them to remove that “Fuel Surcharge”?
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I’m still waiting. Maybe with the drop in fuel prices this time they’ll drop the Surcharge— Ya think?